Integrating generative AI in Robo-Advisory: A systematic review of opportunities, challenges, and strategic solutions

Mahan Tahvildari

doi:10.31893/multirev.2025379

Keywords:

artificial intelligence

Abstract

The integration of generative AI into financial advisory services marks a significant advancement in portfolio optimization, risk assessment, and decision support and recent developments in large language models (LLMs), such as ChatGPT, have demonstrated the ability to process both structured financial data and unstructured market sentiment, enhancing the accuracy and adaptability of investment recommendations. However, the application of generative AI in robo-advisory systems presents ethical, regulatory, and psychological challenges and this study conducts a systematic literature review to examine the technological benefits of AI-driven financial advisory, while also addressing concerns related to algorithmic bias, explainability, and user trust. The review applies a TOWS-based strategic framework to analyze strengths, weaknesses, opportunities, and threats (SWOT) in the adoption of AI-enhanced robo-advisors. Findings consequentially indicate that explainable AI (XAI) and hybrid AI-human oversight models are critical for mitigating transparency concerns and algorithm aversion. While real-time data processing improves investment insights, the black-box nature of generative AI remains a key barrier to regulatory compliance and consumer adoption. Additionally, regulatory fragmentation across jurisdictions complicates AI governance, necessitating adaptive compliance strategies and cross-border cooperation. The research further highlights that financial literacy and trust-building mechanisms, including user-centric onboarding and transparent risk assessments, are essential for overcoming psychological resistance to algorithmic decision-making. In conclusion, the paper proposes an approach for integrating generative AI into robo-advisory systems, combining advanced financial analytics, XAI, human oversight, and ethical AI governance. Future research should focus on empirical evaluations of hybrid advisory models, regulatory harmonization, and AI-driven financial education tools to ensure responsible adoption. These findings contribute to the growing discourse on sustainable and user-centric AI deployment in financial services, providing strategic recommendations for industry practitioners and policymakers.
References
1. Adeyelu, O. O., Ugochukwu, C. E., & Shonibare, M. (2024). Ethical implications of AI in financial decision-making: A review with real-world applications. International Journal of Applied Research in Social Sciences, 6(4), 608–630. https://doi.org/10.51594/ijarss.v6i4.1033
2. Ashrafi, D. M. (2023). Managing consumer’s adoption of artificial intelligence-based financial robo-advisory services: A moderated mediation model. Journal of Indonesian Economy and Business, 38(3), 270–301. https://doi.org/10.22146/jieb.v38i3.6242
3. Ashrafi, D. M., & Kabir, M. R. (2023). Human or AI? Understanding the key drivers of customers’ adoption of financial robo-advisory services: The role of innovation resilience. Journal of Global Business and Technology, 19(1), 18–40.
4. Baek, T. H., & Kim, M. (2023). AI robo-advisor anthropomorphism: The impact of anthropomorphic appeals and regulatory focus on investment behaviors. Journal of Business Research, 64(1), 114039. https://doi.org/10.1016/j.jbusres.2023.114039
5. Cao, S., Jiang, W., Wang, J., & Yang, B. (2024). From man vs. machine to man + machine: The art and AI of stock analyses. Journal of Financial Economics, 160, 103910. https://doi.org/10.1016/j.jfineco.2024.103910
6. Crisanto, J. C., Leuterio, C. B., Prenio, J., & Yong, J. (2024). Regulating AI in the financial sector: Recent developments and main challenges. Financial Stability Institute (FSI) of the Bank for International Settlements (BIS). https://www.bis.org/fsi/publ/insights63.pdf
7. Dwork, C., & Minow, M. (2022). Distrust of artificial intelligence: Sources & responses from computer science & law. Daedalus, 151(2), 309–321. https://doi.org/10.1162/daed_a_01918
8. Fatima, S., & Chakraborty, M. (2024). Adoption of artificial intelligence in financial services: The case of robo-advisory in India. IIMB Management Review, 36(2), 113–125. https://doi.org/10.1016/j.iimb.2024.04.002
9. Flavián, C., Perez-Rueda, A., Belanche, D., & Casaló, L. (2022). Intention to use analytical artificial intelligence in services: The effect of technology readiness and awareness. Journal of Service Management, 33(2), 293–320. https://doi.org/10.1108/JOSM-10-2020-0378
10. Gómez-Martínez, R., & Medrano-Garcia, M. L. (2025). AI technology for developing Bitcoin investment strategies based on altcoin trends. Sustainable Technology and Entrepreneurship, 4(1), 100087. https://doi.org/10.1016/j.stae.2024.100087
11. Jung, D., Glaser, F., & Köpplin, W. (2019). Robo-advisory: Opportunities and risks for the future of financial advisory. In V. Nissen (Ed.), Advances in Consulting Research (pp. 405–427). Springer.
12. Karataş, M., & Cutright, K. M. (2023). Thinking about God increases acceptance of artificial intelligence in decision-making. Psychological and Cognitive Sciences, 120(33), e2218961120. https://doi.org/10.1073/pnas.2218961120
13. Khan, F., Bartáková, G. P., Almadhor, A., Qayyum, A., Abeer, K., & Durrani, A. (2025). Evaluating the capacity and limitations of generative AI in financial decision making. Computer Standards & Interfaces, 93, 103965. https://doi.org/10.1016/j.csi.2024.103965
14. Ko, H., & Lee, J. (2024). Can ChatGPT improve investment decisions? From a portfolio management perspective. Finance Research Letters, 64, 105433. https://doi.org/10.1016/j.frl.2024.105433
15. Kofman, P. (2024). Scoring the ethics of AI robo-advice: Why we need gateways and ratings. Journal of Business Ethics, 198(1), 21–33. https://doi.org/10.1007/s10551-024-05753-5
16. Lee, D. K. C., Guan, C., Yu, Y., & Ding, Q. (2024). A comprehensive review of generative AI in finance. FinTech, 3(3), 460–478. https://doi.org/10.3390/fintech3030025
17. Maier, T., Menold, J., Menold, J., & McComb, C. (2022). The relationship between performance and trust in AI in e-finance. Frontiers in Artificial Intelligence, 5, 891529. https://doi.org/10.3389/frai.2022.891529
18. Manrai, R., & Gupta, K. P. (2023). Investor’s perceptions on artificial intelligence (AI) technology adoption in investment services in India. Journal of Financial Services Marketing, 28(1), 1–14. https://doi.org/10.1057/s41264-021-00134-9
19. Montagnani, M. L., Najjar, M.-C., & Davola, A. (2024). The EU regulatory approach(es) to AI liability, and its application to the financial services market. Computer Law & Security Review, 53, 105984. https://doi.org/10.1016/j.clsr.2024.105984
20. Niszczota, P., & Abbas, S. (2023). GPT has become financially literate: Insights from financial literacy tests of GPT and a preliminary test of how people use it as a source of advice. Finance Research Letters, 58(A), 104333. https://doi.org/10.1016/j.frl.2023.104333
21. Oehler, A., & Horn, M. (2024). Does ChatGPT provide better advice than robo-advisors? Finance Research Letters, 60, 104898. https://doi.org/10.1016/j.frl.2023.104898
22. Pathak, A., & Bansal, V. (2024). AI as decision aid or delegated agent: The effects of trust dimensions on the adoption of AI digital agents. Computers in Human Behavior: Artificial Humans, 2(2), 100094. https://doi.org/10.1016/j.chbah.2024.100094
23. Pelster, M., & Val, J. (2024). Can ChatGPT assist in picking stocks? Finance Research Letters, 59(1), 104786. https://doi.org/10.1016/j.frl.2023.104786
24. Pisoni, G., & Díaz-Rodríguez, N. (2023). Responsible and human-centric AI-based insurance advisors. Information Processing and Management, 60(3), 103273. https://doi.org/10.1016/j.ipm.2023.103273
25. Roh, T., Park, B. I., & Xiao, S. (2023). Adoption of AI-enabled robo-advisors in fintech: Simultaneous employment of UTAUT and the theory of reasoned action. Journal of Electronic Commerce Research, 24(1), 29–47.
26. Romanenko, O., Narayan, A., & Kwon, R. H. (2023). ChatGPT-based investment portfolio selection. Operations Research Forum, 4(4), 91. https://doi.org/10.1007/s43069-023-00277-6
27. Singh, S., & Kumar, A. (2025). Investing in the future: an integrated model for analysing user attitudes towards Robo-advisory services with AI integration. Vilakshan-XIMB Journal of Management, 22(1), 158-175. https://doi.org/10.1108/XJM-03-2024-0046
28. Statista GmbH. (2024). Robo-Advisors - Worldwide. Statista GmbH. https://www.statista.com/outlook/fmo/wealth-management/digital-investment/robo-advisors/worldwide
29. Ullah, R., Ismail, H. B., Khan, M. T., & Zeb, A. (2024). Nexus between Chat GPT usage dimensions and investment decision making in Pakistan: Moderating role of financial literacy. Technology in Society, 76(4), 102454. https://doi.org/10.1016/j.techsoc.2024.102454
30. vom Brocke, J. S. (2009). Reconstructing the giant: On the importance of rigour in documenting the literature search process. In Proceedings of the 17th European Conference on Information Systems (ECIS 2009) (pp. 2206–2217). Verona, Italy.
31. Walter, B. v., Kremmel, D., & Jäger, B. (2022). The impact of lay beliefs about AI on adoption of algorithmic advice. Marketing Letters, 33(1), 143–155. https://doi.org/10.1007/s11002-021-09589-1
32. Wang, Y. (2024). Ethical considerations of AI in financial decision. Computing and Artificial Intelligence, 2(1), 1290. https://doi.org/10.59400/cai.v2i1.1290
33. Weber, P., Carl, K. V., & Hinz, O. (2024). Applications of explainable artificial intelligence in finance—a systematic review of finance, information systems, and computer science literature. Management Review Quarterly, 74(2), 867–907. https://doi.org/10.1007/s11301-023-00320-0
34. Zheng, X., Li, J., Lu, M., & Wang, F. Y. (2024). New paradigm for economic and financial research with generative AI: Impact and perspective. IEEE Transactions on Computational Social Systems, 11(3), 3457–3467. https://doi.org/10.1109/TCSS.2023.3334306
35. Zhu, H., Pysander, E.-L. S., & Söderberg, I.-L. (2023). Not transparent and incomprehensible: A qualitative user study of an AI-empowered financial advisory system. Data and Information Management, 7(3), 100041. https://doi.org/10.1016/j.dim.2023.100041
36. Zhu, H., Vigren, O., & Söderberg, I.-L. (2024). Implementing artificial intelligence empowered financial advisory services: A literature review and critical research agenda. Journal of Business Research, 174, 114494. https://doi.org/10.1016/j.jbusres.2023.114494

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to cite

Tahvildari, M. (2025). Integrating generative AI in Robo-Advisory: A systematic review of opportunities, challenges, and strategic solutions. Multidisciplinary Reviews, 8(12), 2025379. https://doi.org/10.31893/multirev.2025379

[1] Adeyelu, O. O., Ugochukwu, C. E., & Shonibare, M. (2024). Ethical implications of AI in financial decision-making: A review with real-world applications. International Journal of Applied Research in Social Sciences, 6(4), 608–630. https://doi.org/10.51594/ijarss.v6i4.1033

[2] Ashrafi, D. M. (2023). Managing consumer’s adoption of artificial intelligence-based financial robo-advisory services: A moderated mediation model. Journal of Indonesian Economy and Business, 38(3), 270–301. https://doi.org/10.22146/jieb.v38i3.6242

[3] Ashrafi, D. M., & Kabir, M. R. (2023). Human or AI? Understanding the key drivers of customers’ adoption of financial robo-advisory services: The role of innovation resilience. Journal of Global Business and Technology, 19(1), 18–40.

[4] Baek, T. H., & Kim, M. (2023). AI robo-advisor anthropomorphism: The impact of anthropomorphic appeals and regulatory focus on investment behaviors. Journal of Business Research, 64(1), 114039. https://doi.org/10.1016/j.jbusres.2023.114039

[5] Cao, S., Jiang, W., Wang, J., & Yang, B. (2024). From man vs. machine to man + machine: The art and AI of stock analyses. Journal of Financial Economics, 160, 103910. https://doi.org/10.1016/j.jfineco.2024.103910

[6] Crisanto, J. C., Leuterio, C. B., Prenio, J., & Yong, J. (2024). Regulating AI in the financial sector: Recent developments and main challenges. Financial Stability Institute (FSI) of the Bank for International Settlements (BIS). https://www.bis.org/fsi/publ/insights63.pdf

[7] Dwork, C., & Minow, M. (2022). Distrust of artificial intelligence: Sources & responses from computer science & law. Daedalus, 151(2), 309–321. https://doi.org/10.1162/daed_a_01918

[8] Fatima, S., & Chakraborty, M. (2024). Adoption of artificial intelligence in financial services: The case of robo-advisory in India. IIMB Management Review, 36(2), 113–125. https://doi.org/10.1016/j.iimb.2024.04.002

[9] Flavián, C., Perez-Rueda, A., Belanche, D., & Casaló, L. (2022). Intention to use analytical artificial intelligence in services: The effect of technology readiness and awareness. Journal of Service Management, 33(2), 293–320. https://doi.org/10.1108/JOSM-10-2020-0378

[10] Gómez-Martínez, R., & Medrano-Garcia, M. L. (2025). AI technology for developing Bitcoin investment strategies based on altcoin trends. Sustainable Technology and Entrepreneurship, 4(1), 100087. https://doi.org/10.1016/j.stae.2024.100087

[11] Jung, D., Glaser, F., & Köpplin, W. (2019). Robo-advisory: Opportunities and risks for the future of financial advisory. In V. Nissen (Ed.), Advances in Consulting Research (pp. 405–427). Springer.

[12] Karataş, M., & Cutright, K. M. (2023). Thinking about God increases acceptance of artificial intelligence in decision-making. Psychological and Cognitive Sciences, 120(33), e2218961120. https://doi.org/10.1073/pnas.2218961120

[13] Khan, F., Bartáková, G. P., Almadhor, A., Qayyum, A., Abeer, K., & Durrani, A. (2025). Evaluating the capacity and limitations of generative AI in financial decision making. Computer Standards & Interfaces, 93, 103965. https://doi.org/10.1016/j.csi.2024.103965

[14] Ko, H., & Lee, J. (2024). Can ChatGPT improve investment decisions? From a portfolio management perspective. Finance Research Letters, 64, 105433. https://doi.org/10.1016/j.frl.2024.105433

[15] Kofman, P. (2024). Scoring the ethics of AI robo-advice: Why we need gateways and ratings. Journal of Business Ethics, 198(1), 21–33. https://doi.org/10.1007/s10551-024-05753-5

[16] Lee, D. K. C., Guan, C., Yu, Y., & Ding, Q. (2024). A comprehensive review of generative AI in finance. FinTech, 3(3), 460–478. https://doi.org/10.3390/fintech3030025

[17] Maier, T., Menold, J., Menold, J., & McComb, C. (2022). The relationship between performance and trust in AI in e-finance. Frontiers in Artificial Intelligence, 5, 891529. https://doi.org/10.3389/frai.2022.891529

[18] Manrai, R., & Gupta, K. P. (2023). Investor’s perceptions on artificial intelligence (AI) technology adoption in investment services in India. Journal of Financial Services Marketing, 28(1), 1–14. https://doi.org/10.1057/s41264-021-00134-9

[19] Montagnani, M. L., Najjar, M.-C., & Davola, A. (2024). The EU regulatory approach(es) to AI liability, and its application to the financial services market. Computer Law & Security Review, 53, 105984. https://doi.org/10.1016/j.clsr.2024.105984

[20] Niszczota, P., & Abbas, S. (2023). GPT has become financially literate: Insights from financial literacy tests of GPT and a preliminary test of how people use it as a source of advice. Finance Research Letters, 58(A), 104333. https://doi.org/10.1016/j.frl.2023.104333

[21] Oehler, A., & Horn, M. (2024). Does ChatGPT provide better advice than robo-advisors? Finance Research Letters, 60, 104898. https://doi.org/10.1016/j.frl.2023.104898

[22] Pathak, A., & Bansal, V. (2024). AI as decision aid or delegated agent: The effects of trust dimensions on the adoption of AI digital agents. Computers in Human Behavior: Artificial Humans, 2(2), 100094. https://doi.org/10.1016/j.chbah.2024.100094

[23] Pelster, M., & Val, J. (2024). Can ChatGPT assist in picking stocks? Finance Research Letters, 59(1), 104786. https://doi.org/10.1016/j.frl.2023.104786

[24] Pisoni, G., & Díaz-Rodríguez, N. (2023). Responsible and human-centric AI-based insurance advisors. Information Processing and Management, 60(3), 103273. https://doi.org/10.1016/j.ipm.2023.103273

[25] Roh, T., Park, B. I., & Xiao, S. (2023). Adoption of AI-enabled robo-advisors in fintech: Simultaneous employment of UTAUT and the theory of reasoned action. Journal of Electronic Commerce Research, 24(1), 29–47.

[26] Romanenko, O., Narayan, A., & Kwon, R. H. (2023). ChatGPT-based investment portfolio selection. Operations Research Forum, 4(4), 91. https://doi.org/10.1007/s43069-023-00277-6

[27] Singh, S., & Kumar, A. (2025). Investing in the future: an integrated model for analysing user attitudes towards Robo-advisory services with AI integration. Vilakshan-XIMB Journal of Management, 22(1), 158-175. https://doi.org/10.1108/XJM-03-2024-0046

[28] Statista GmbH. (2024). Robo-Advisors - Worldwide. Statista GmbH. https://www.statista.com/outlook/fmo/wealth-management/digital-investment/robo-advisors/worldwide

[29] Ullah, R., Ismail, H. B., Khan, M. T., & Zeb, A. (2024). Nexus between Chat GPT usage dimensions and investment decision making in Pakistan: Moderating role of financial literacy. Technology in Society, 76(4), 102454. https://doi.org/10.1016/j.techsoc.2024.102454

[30] vom Brocke, J. S. (2009). Reconstructing the giant: On the importance of rigour in documenting the literature search process. In Proceedings of the 17th European Conference on Information Systems (ECIS 2009) (pp. 2206–2217). Verona, Italy.

[31] Walter, B. v., Kremmel, D., & Jäger, B. (2022). The impact of lay beliefs about AI on adoption of algorithmic advice. Marketing Letters, 33(1), 143–155. https://doi.org/10.1007/s11002-021-09589-1

[32] Wang, Y. (2024). Ethical considerations of AI in financial decision. Computing and Artificial Intelligence, 2(1), 1290. https://doi.org/10.59400/cai.v2i1.1290

[33] Weber, P., Carl, K. V., & Hinz, O. (2024). Applications of explainable artificial intelligence in finance—a systematic review of finance, information systems, and computer science literature. Management Review Quarterly, 74(2), 867–907. https://doi.org/10.1007/s11301-023-00320-0

[34] Zheng, X., Li, J., Lu, M., & Wang, F. Y. (2024). New paradigm for economic and financial research with generative AI: Impact and perspective. IEEE Transactions on Computational Social Systems, 11(3), 3457–3467. https://doi.org/10.1109/TCSS.2023.3334306

[35] Zhu, H., Pysander, E.-L. S., & Söderberg, I.-L. (2023). Not transparent and incomprehensible: A qualitative user study of an AI-empowered financial advisory system. Data and Information Management, 7(3), 100041. https://doi.org/10.1016/j.dim.2023.100041

[36] Zhu, H., Vigren, O., & Söderberg, I.-L. (2024). Implementing artificial intelligence empowered financial advisory services: A literature review and critical research agenda. Journal of Business Research, 174, 114494. https://doi.org/10.1016/j.jbusres.2023.114494

Abstract

References

How to cite